MALTA BUDGET 2018 How will it impact you?
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MALTA BUDGET 2018 How will it impact you?
CONTENTS
GENERAL OUTLOOK 4
FISCAL MEASURES 6
SOCIAL MEASURES 8
OTHER MEASURES 10
3GENERAL
OUTLOOK
4GENERAL OUTLOOK
Macroeconomic highlights: Key variables
6.3%
5.5%
National debt as a % of GDP expected
to drop to 54.93% in 2017
COLA set to be €1.75 a week
- €88 Million projected surplus for 2017
Jan-Jun 2016
2017 Actually
5FISCAL
MEASURES
Income Taxation
VAT
Stamp Duty
6FISCAL ELEMENTS
Income Taxation VAT Stamp Duty
• Full-time and part-time employees earning less • While VAT registration for any small business • The stamp duty exemption for first-time buyers
than €60,000 will be eligible for a one-time tax remains mandatory, the exempt threshold on the acquisition of their residential property
refund varying between €40 and €68. The exact has been increased from €14,000 to €20,000 of has been extended. The exemption applies for
amount of refund shall depend on an individual’s turnover. the first €150,000.
total income level and tax status.
• VAT on the hiring of bicycles has been reduced • Persons selling their residential property and
• The tax exemption on pension (introduced from the standard 18% to 7%. Moreover, the VAT replacing it with a second one will become
as from 1st January 2017) will be increased from incurred on the acquisition of bicycles and eligible for a stamp duty refund of up to €3,000.
€13,000 to €13,200, while the minimum pedelec bicycles will continue to be refunded. This refund could increase to up to €5,000 in
retirement pension is being increased by €2 cases of persons with disability.
weekly. The calculation of pensions for people • For the first time we shall have VAT Grouping
working beyond the pensionable age shall be provisions enabling supplies between members • Acquisition of properties in Gozo or in Urban
revised. of the same VAT group to be regarded as outside Conversations Areas (UCAs) shall continue to
scope for VAT purposes and deemed to be enjoy from a reduced rate of stamp duty from
• A tax credit on the first €60,000 of earned carried out by the same VAT person. Insofar the standard 5% to 2% in case of Gozo and 2.5%
income will be granted to persons (less than these have been limited for the gaming and in case of UCAs.
40 years of age) who continue studying further financial services sectors.
at Masters (MQF 7) or Ph.D (MQF 8) levels. The
tax credit may be utilised in 1 year in case of
Masters Degrees and within 2 years for Ph.D.
• The ever popular MicroInvest scheme has been
expanded considerably with cappings of the
qualifying expenditure increasing from €30,000
to €50,000 (for Malta-based businesses), to
€70,000 (for Malta-based businesses), and to
€70,000 for businesses mainly owned by women).
7SOCIAL
MEASURES
Employment Related
Property Related
Other Social Measures
8SOCIAL MEASURES
EMPLOYMENT PROPERTY OTHER
RELATED RELATED SOCIAL MEASURES
• An additional one-day shall be added to all • The Government has committed a €50m • The in-Work Benefit rate will be increased from
employees’ list of vacation days. investment for the construction of almost 700 €350 to €450 yearly per child where only one
social housing units. parent is in employment. There will also be an
• Employees on minimum wage shall enjoy a €3 increase in the community worker scheme of
per week increase after a year in employment • The eligibility criteria for enjoying the rental €200 per month.
and an additional €3 (€6 in total) per week subsidy has been broadened.
from their third year of employment. • Maximum aid of €10,000 for expenses incurred
• Rehabilitation expenditure on unused property to for adopting children (this aid will also apply to
be rented out for social housing purposes over a those who are currently undergoing this process).
10 year period shall be subject to financial
assistance of up to €25,000. • Any person aged 75 years and over and still living
in his own household shall be eligible to receive a
• Aimed at encouraging people to acquire grant payment of €300.
property, the Government shall be extending
the social loan programme for people in need • Working widowers shall still be eligible for sickness
for financial backup. benefits even if in receipt of a contributory pension.
• There shall be the introduction of a new scheme
seeking to enable the redemption of properties on
temporary emphyteusis which will soon expire.
9OTHER
MEASURES
10OTHER MEASURES
• A white paper on rents will be issued in the coming weeks wherein
it will specified that all property rent agreements must be
registered, with the contracts specifying the lease term and amount
due in rent through the whole term. • The Individual Investor Programme (IIP) will be
extended.
• Elderly people who hold a government tenement but live at a
government home for the elderly will be able to retain 40% of their • Assistance is to be provided in the blockchain
pension if they return their residence to the government. technology area including:
o The adoption of blockchain to facilitate
• Facility regarding on-line submission of social security and VAT secure access to certificates issued by Mcast,
forms to be widened to cover companies employing 10 workers or NCFHE and ITS;
more.
o The upcoming launch of a blockchain lab at
• Employers who offer a minimum of 3 year full time contract of MITA;
employment in Gozo to a Gozitan employee, will receive a 30%
refund (for up to a maximum of €6,000) calculated on the o The creation of a web-portal to serve as a
employee’s average wage. point of communication for those interested
in the technologies;
• Introduction of an offsetting system for Maltese companies,
allowing them to offset certain payments due to and from the o Support to business start-ups.
Maltese government.
• Matsec and Sec exam fees will be halved in 2018
and removed entirely by 2019.
• The scheme granting 18 year olds a free bus pass
for a year will now be extended to all those aged
between 16 and 20.
11OTHER MEASURES
• Refund on purchases of bicycles and motorcycles will be
increased, while electric, hybrid and similar vehicles will be
exempt from tax registration. This exemption will have a
ceiling of €200,000 for businesses. Such vehicles will also
be exempt from paying their road licence for 5 years.
• It is expected that free transport to and from Church
and Independent schools is to be introduced as of the next
scholastic year.
• €700 million investment over seven years for infrastructure,
including the maintenance of existing roads.
• Ongoing exploration of the feasibility of the Malta – Gozo
tunnel connection.
• Expansion of the scheme for the collection of organic
waste and drink containers.
• An investment of more than €150 million into an energy
from waste project.
12CONTACTS
Mr Benjamin Griscti
Director - Tax
bgriscti@ksimalta.com
Ms Kristine Scerri
Tax Advisor
kscerri@ksimalta.com
KSi Malta
Villa Gauci, Mdina Road, Balzan BZN 9031, Malta, Europe
Tel: (+356) 2122 6176 | Fax: (+356) 2122 6019 | E-mail: info@ksimalta.com | www.ksimalta.com
Member of:
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